Braskem Deal Failure, Dividend Freeze Complicate Brazil's Odebrecht Restructuring

Odebrecht SA’s failure to sell its controlling stake in petrochemical company Braskem SA to LyondellBasell Industries NV and lack of cash are complicating the task of restructuring 80 billion reais ($20.67 billion) in debt owed by the corruption-ensnared conglomerate, three sources with knowledge of the matter said, Reuters reported. The three people requested anonymity to disclose private discussions. The conglomerate was counting on Braskem dividends to service its debt. But a court order in April related to environmental damages by the petrochemical company’s operation’s in the Brazilian northeastern state of Alagoas froze dividend payments. LyondellBasell said on Tuesday it ended talks with Odebrecht SA to buy Braskem “after careful consideration” but did not elaborate further. Shares in the Brazilian petrochemical producer were down 17% in late afternoon trading in Sao Paulo. Read more

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